After more than a decade of legislative proposals, the Grand National Assembly of Turkey has approved the Data Protection Law (“Law“). The next step is for the new law to receive approval or comments from Turkey’s President, then eventually be published in the Official Gazette with the official text and an enforcement date. The Law addresses responsibilities of key actors, companies and data processing companies, as well as appropriate methods for processing and transmitting data. It introduces definitions for “Personal Data”, “Sensitive Data”, “Data Processor”, “Data Controller” and “Explicit Consent”, among others, as well as a general prohibition on processing or storing such data without express consent from the data subject. For personal data which is already stored or begun processing before the Law’s enforcement date, data processors and data controllers have two years to ensure the data complies with the new requirements.

The Ministry of Justice of Turkey submitted the Data Protection Law to the Council of Ministers on 18 January 2016. The Assembly approved the Law on 24 March 2016, with some changes relating to transferring data outside Turkey and the election process for the Data Protection Authority. The next step in the enactment process is for the new law to receive approval from Turkey’s President and to be published in the Official Gazette, with the official text and an enforcement date. Secondary legislation should be enacted within one year of the Law’s enforcement date.

The Law outlines a relatively similar framework to the European data protection system. However, further changes are necessary if Turkish legislation is to become completely aligned with the European Union’s data protection regime.

Significant aspects introduced by the Law include:

– A range of definitions, including notably:

– “Personal Data”, meaning any information relating to an identified or identifiable living

– “Sensitive Data”, a sub-set of Personal Data, which is subject to certain extra It is defined as information which reveals racial or ethnic origin, political opinions, religious or philosophical beliefs, appearance, memberships of unions, associations or foundations, as well as information about health, sexual life, criminal records, punitive measures and biometric data.

– “Data Controller”, “Data Processor” and “Data Controller Registry” are defined, although a different approach to European Union legislation has been accepted.

– “Explicit consent” is defined.

– “Anonymization” is introduced.

– Processing Personal or Sensitive data without express consent is prohibited. Notably, the Draft Law is silent on how such consent should be obtained. Therefore, companies would be prudent to record and store consents in writing and/or electronically.

– The difference between data controller and data processor is clarified, along with respective obligations. Data controllers must register with the newly established Data Controller Registry, even before they begin to actively process data. The registry will be launched following establishment of the Data Protection Board, within six months of the Law’s enforcement date.

– The Law will be enforceable as from the publication date in the Official Gazette. Therefore, the Law’s requirements will apply immediately for collecting and storing new personal data. An exception is the obligation register with the Data Controller Registry. The registry will be launched following establishment of the Data Protection Board, within six months of the Law’s enforcement date.

– Personal data which is already collected or stored before the Law’s enforcement date must become compliant with the new requirements within two years. If the data is not compliant at that time, it must be deleted or anonymized.

– Persons or companies which collect or store personal data must comply with technical and administrative measures and supervisions.

Procedures for transferring data outside Turkey or to third parties are clarified, along with limited exceptions where express consent is not necessary.

A legislative structure and definition is introduced for Turkey’s national data protection authority: the Data Protection Authority and Data Protection Board. The Data Protection Authority will include the Data Protection Board and the Board’s President.

The Data Protection Board will be established within six months of the legislation being published. Out of nine proposed Authority members, two would be appointed by the Council of Ministers, while two would directly be appointed by Turkey’s President. The remaining five member will be elected by the Turkish Parliament.

Therefore, persons or companies which store or process personal data should pay attention for further developments on this topic in the near future. Key milestones are:

– Publication in the Official Gazette and enforcement date (the Law’s obligations will apply for new data from this date onward and this date will be the basis for measuring other milestones).

– Six months after enforcement (deadline for launch of the Data Controller Registry).

– 12 months after enforcement (deadline for secondary legislation).

– Two years after enforcement (deadline for ensuring all data already collected prior to the Law’s enforcement date is compliant).

Significant structural changes have been made to Turkey’s unlicensed electricity generation market. The most important change is a new 1 MW total installed capacity limit for unlicensed facilities held directly or indirectly by the same persons or entities. Accordingly, affiliated or group companies will no longer be allocated more than 1 MW of capacity for the same sub-station connection point. Share transfers are now restricted for applicants until provisional acceptance of an unlicensed facility is complete. A minimum self-consumption ratio is also introduced, placing a cap on the excess energy which can be sold to distribution companies. Other new requirements are also introduced for connections, mergers/demergers, as well as application procedures. Certain aspects of the new requirements will not apply to unlicensed applicants which obtained a connection invitation letter before 23 March 2016.

The Regulation Amending the Regulation on Unlicensed Electricity Generation in the Electricity Market (“AmendmentRegulation”) and the Communiqué Amending the Communiqué on Unlicensed Electricity Generation in Electricity Market (“AmendmentCommuniqué”) were published in Official Gazette number 29662 on 23 March 2016, entering into effect on the same date.

The Amendment Regulation change certain provisions of the Regulation on Unlicensed Electricity Generation in the Electricity Market (“Unlicensed Regulation”), published in Official Gazette number 28783 on 2 October 2013.

Important changes introduced by the Amendment Regulation include:

Changes to the Connection Principles

– 1MW Combined Capacity Limit for Affiliated Companies: The Amendment Regulation introduces a restriction whereby each real person, legal entity or legal entities having such real persons or legal entities as their direct or indirect shareholders, is allowed up to 1 MW capacity jointly at each transformer sub-station, for unlicensed renewable energy generation purposes. Therefore, affiliated or group companies can no longer be allocated more than 1 MW of capacity for the same sub-station connection point, regardless of the number of consumption units. Legal entities must present their direct and indirect shareholding structures to the relevant network operator (either TEİAŞ or the regional distribution company) (Article 6(10), Unlicensed Regulation).

– Distance to the Grid: The Amendment Regulation introduces a limit for unlicensed projects regarding their distance to the grid (Article 6(8), Unlicensed Regulation):

– Projects with up to 0.499 MW capacity must not be more than 5 km from the grid.

– Projects with more than 0.499 MW capacity must not be more than 10 km from the grid).

– Maximum Installed Capacity Limit: The Amendment Regulation introduces a minimum self-consumption ratio, which places a maximum limit for the excess energy which can be sold to distribution companies. Accordingly, the installed capacity of unlicensed wind and solar generation facilities cannot exceed 30 times the capacity of the consumption unit associated with the generation unit (Article 6/12, Unlicensed Regulation).

Restrictions on Share Transfers and Mergers/Demergers

– Restrictions on Share Transfers: The Amendment Regulation introduces a provision which prevents shareholders transferring shares in legal entities which are unlicensed facility applicants, until the facility’s provisional acceptance is complete (i.e. until the facility commences its operations). Failure to wait will result in cancellation of the unlicensed facility’s connection calling letter. After this lock-up period, the relevant network operator (either TEİAŞ or the regional distribution company) must be informed of any share transfers at least one month before closing the share transfer transaction. The relevant network operator must be advised of the updated shareholding structure (after the share transfer) within ten business days of the transfer (Article 31/20 of the Unlicensed Regulation).

– Rules for Mergers/Demergers: The Amendment Regulation introduces new rules for mergers and demergers of unlicensed facilities. Mergers and demergers of legal entities which own unlicensed facilities can now only be processed after the provisional takeover of the unlicensed facility is complete.

Merger applications can now only be made if the unlicensed facility’s owner is either:

– The transferor parent, who merges with a transferee subsidiary (which the parent holds 100% share in); or

– The transferee subsidiary merges with its parent company (which holds 100% the subsidiary’s shares).

The same principle also applies to demergers, whereby a company owning the unlicensed facility can only be split into companies which the original company holds 100% shares in (Article 31(18) and Article 31(19), Unlicensed Regulation).

Ownership Restrictions for Distribution and Supply Companies

According to the Amendment Regulation, the following persons or entities are no longer entitled to own solar or wind based unlicensed facilities above an installed capacity of 50 kW which are located in the same region where they engage in distribution or supply activities:

– Direct or indirect shareholders of distribution companies and appointed supply companies.

– Persons employed by distribution companies and appointed supply companies, or their shareholders (direct or indirect).

Turkey’s Energy Market Regulatory Authority (“Authority”) has announced a proposal to remove a financial incentive for unlicensed electricity generation projects which use domestic products. The proposal is intended to keep pace with recent developments in Turkey’s electricity market. The incentive would continue to be available for other renewable projects. The public submission period for the proposed changes closed on 21 March 2016 and the Authority is now considering comments received.

Currently, unlicensed projects can benefit from certain feed-in-tariffs (within the scope of Tariff No. I of Renewable Energy Law) when selling surplus energy to authorized distribution companies through the YEKDEM mechanism (Renewable Energy Resource Support Mechanism). Under Tariff II, if mechanical or electro-mechanical devices are used renewable projects are manufactured in Turkey, a domestic product fee is added to the feed-in-tariff prices, as an additional incentive. The incentive ranges from USD $0.04 to $0.25 per kWh, depending on the type of plant and device.

The amendments propose to cancel Tariff No. II (attached to the Renewable Energy Law) for unlicensed projects. Tariff II would continue to be available for qualifying renewable projects which use domestic products (besides unlicensed projects). Tariff I would continue to be available for unlicensed projects.

The proposed amendments include:

– Application of Tariff No II attached to the Renewable Energy Law for unlicensed energy projects would be cancelled (Article 4(1) of Regulation on Documentation and Support of Renewable Energy Resources is proposed for amendment).

– References to application of Tariff No. II attached to the Renewable Energy Law for unlicensed projects would be removed throughout from the Regulation on Unlicensed Energy Generation (Article 20(c) of the Regulation on Unlicensed Energy Generation is proposed for amendment, while Articles 21 and 31 of the Regulation on Unlicensed Energy Generation are proposed for annulment).

– The calculation method for additional incentives for unlicensed projects within the scope of Tariff No. II of the Renewable Energy Law would be removed (Article 23 of the Communiqué Regarding Application of Regulation on Unlicensed Energy Generation and Communiqué Regarding Application of Regulation on Unlicensed Energy Generation is proposed for amendment).

Please see this link for full text of the draft Regulations (only available in Turkish).

Turkey has updated and amended its block exemption for R&D agreements. R&D agreements which meet the criteria are exempt from a general legislative prohibition on agreements, concerted practices and decisions which limit competition. Major changes apply to the market threshold, exemption period, joint exploitation of R&D results, as well as agreement clauses which disqualify R&D agreements from accessing the block exemption. The updated R&D block exemption represents a more compatible regulatory structure with EU standards than previously existed in Turkey.

The Communiqué on Block Exemption for Research and Development Agreements (Communiqué No: 2016/5) (“Communiqué”) was published in Official Gazette number 29655 on 16 March 2016, entering into effect on the same date.

Significant changes introduced by the Communiqué include:

– The definition of R&D studies has expanded. Previously, specialization in research, development, production or distribution was required for a R&D study to benefit from the block exemption. The Communiqué now states that specialisation in the context of research and development or exploitation is enough.

– A new definition for paid R&D is introduced and these activities are included in the block exemption’s scope. Accordingly, paid R&D refers to R&D which is carried out by one party, but financed by another.

– An agreement can benefit from the block exemption if it involves the joint use of results and meets market share thresholds. The Communiqué extends the scope of this concept by changing “joint use of results” to become “joint exploitation”.

– A single market share threshold of 40% now applies, whether an R&D agreement relates to:

– One of the parties.

– An undertaking controlled by parties.

– A third undertaking appointed by parties together.

– If the parties are not competing undertakings in the same market, the market share threshold assessment will not apply to their R&D agreement.

– Parties are prohibited from using technical information and R&D results independently of each other, if the agreement only addresses R&D. The Communiqué now excludes confidential business information and undisclosed information from the scope of the prohibition.

– An exemption period applies if the R&D results will be jointly used, beginning on the date the product is first launched in Turkey. The Communiqué increases the exemption period from five to seven years.

– Agreements cannot benefit from the block exemption if they involve joint determination of the product’s sale amount, or limitations on a party independently determining the sale amount. An exception is introduced to the effect that this prohibition will not apply if the R&D agreement involves joint exploitation of the results.

– Agreements which included certain obligations could not benefit from the block exemption. The block exemption is not applicable to, among others, the following obligations.

– An obligation not to challenge the validity of intellectual property rights about and/or related to R&D results after completion of R&D or termination of the agreement.

– An obligation not to grant licenses to third parties to manufacture the contract products, or to apply the contract technologies if the agreement does not provide for the joint exploitation of the results or the joint exploitation of the results.

If there is no joint exploitation clause, or in practice there is no de factor exploitation by the parties, there can be no restriction on third party licensing under the R&D agreement.

– Provision for assessing and applying the market share threshold are introduced, similar to the Block Exemption Communiqué on Vertical Agreements (Communiqué No. 2002/2)

Agreements signed before 16 March 2016 receive until 15 April 2016 to meet the Communiqué’s revised conditions and benefit from the block exemption.

The Communiqué abolishes the existing Block Exemption for Research and Development Agreements (Communiqué No: 2003/2), published in Official Gazette number 25212 on 27 August 2003.

Please see this link for the full text of the Communiqué (only available in Turkish).

The value thresholds for total assets and net annual sales which trigger an obligation to obtain an independent audit have lowered in Turkey. The primary change is that companies with total assets of more than TRY 40 million or net annual sales of more than TRY 80 million may now be required to obtain an independent audit (thresholds were previously TRY 50 million and 100 TRY 100 million, respectively). The asset and sales thresholds for energy or ICT companies have also decreased.

The Decision Amending the Decision on Determination of Companies Subject to Independent Audit (“Amendment Decision”) was published in Official Gazette number 29658 on 19 March 2016. The Amendment Decision entered into effect on 19 March 2016 with the provisions become valid as of 1 January 2016. The Amendment Decision regulated the numeral thresholds as to procedures and principles for determining companies to be subject to independent audit as per the Turkish Commercial Code numbered 6102.

Under the Amendment Decision, companies (including affiliates and subsidiaries) must now subject to an independent audit if they meet two of these criteria:

– Total assets are TRY 40 million or more (previously TRY 50 million).

– The net annual sales revenue is TRY 80 million or more (previously TRY 100 million).

– 200 employees or more.

Companies with at least 25% of their share capital belonging directly or indirectly to professional organizations with public institution status, unions, associations, foundations, cooperatives and higher institutions must undertake an independent audit if they meet two of these criteria:

– Total assets are TRY 30 million or more (previously TRY 40 million).

– The net annual sales revenue is TRY 40 million or more (previously TRY 50 million).

– 25 employees or more.

With certain exclusions, the Amendment Decision requires companies which are subject to supervision by the Information and Communication Technologies Authority or regulations of the Energy Market Regulatory Authority to undertake an independent audit if they meet two of these criteria:

– Total assets are TRY 30 million or more (previously TRY 50 million).

– The net annual sales revenue is TRY 60 million or more (previously TRY 100 million).

– 200 employees or more.

The Amendment Decision also decreases threshold triggers for total asset and net annual sales revenue for:

– Companies that publish national daily newspapers

– Companies which have been taken over by a fund

– State-owned enterprises and their subsidiaries

– Companies with at least 50% of their share capital owned by municipalities.

Please see this link for the full text of the Amendment Decision (only available in Turkish).

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New Disclosure and Operation Requirements for Investment Enterprises and Intermediary Institutions in Turkey

Turkey’s Capital Market Board (“Board”) has amended regulations for investment enterprises and intermediary institutions. Additional website information disclosures now apply for investment enterprises. Further changes apply to disclosures about customer profit/loss distribution for leveraged transactions by intermediary institutions, as well as procedures and principles for ancillary services and outsourcing.

The Communiqué Amending the Communiqué on Principles Regarding Establishment and Activities of Investment Enterprises (“AmendmentCommuniqué”) was published in Official Gazette number 29593 on 14 January 2016, entering into effect on the same date.

Significant changes introduced by the Amendment Communiqué include:

– Investment enterprises’ websites must now also include:

– Statements about extraordinary market conditions.

– Price provider enterprises and their residential address, as well as statements about any direct or indirect shareholding relationship with price provider enterprises.

– The ratio of rejected orders, compared to all orders.

– Deviations in price and difference variation for each asset for investment services and activities.

– The number of customer complaints and ratio of complaints compared to total customer numbers.

– Intermediary institutions must:

– Store information on the proportional profit/loss distribution of customer accounts for leveraged transactions until they announce the following year’s distribution.

– Announce proportional profit/loss distribution for leveraged transactions on the main webpage where customer transactions occur, under the heading “Your Probability of Loss”.

– Customers (or certain groups of customers) will gain additional income or increase their current income

– Transactions are guaranteed or secured, or that transactions are carried out under a guarantee by the Board (or other capital market institution).

– Transactions carry no risk, require no knowledge, or that it is possible to have knowledge and make investments with short term trainings.

– Statements causing unfair trade by promoting the intermediary institution without relying on any statistical or concrete data.

– Statements aimed at customers’ religious, cultural or social sensibilities.

– Certain exchange or parity objectives.

– Any incorrect or misleading impressions.

– Ancillary services (as defined under the Law on Capital Markets) and their marketing activities are specified as services which intermediary institutions cannot outsource. Procurement, maintenance, repair and update services for the following are now excluded:

– Board notifications required by intermediary institutions for outsource services must now be made within ten days of initiating the services (previously required before initiation).

– The following are now noted as prohibited transactions for intermediary institutions:

– Recovery of customers’ loss arising out of transactions.

– Providing funds to customers for them to perform transactions, or to be included in a certain group.

Please see this link for the full text of the Amendment Communiqué (only available in Turkish).

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Turkey Introduces New Requirements for Derivative and Leveraged Transactions by Investment Enterprises

Turkey’s Capital Markets Board has updated a range of operational, disclosure and notification requirements for intermediary institutions and portfolio intermediary institutions. Related requirements for position limits, guarantees, reporting and service agreements are also updated with respect to derivative and leveraged transactions by investment enterprises.

The Communique Amending the Communique on Principles Regarding Operating Permit to be Obtained by Investment Enterprises and Principles Regarding Investment Services, Activities and Ancillary Services with no III-37.1 (“Amendment Communique”) was published in Official Gazette number 29593 on 14 January 2016, entering into effect on the same date.

Significant amendments by the Amendment Communique include:

– Derivative transactions by investment and development banks are included in the definition of operation intermediary activities and portfolio intermediary activities, in certain conditions.

– Professional clients can now make written requests that the prohibition on client damages not exceeding the investor guarantee should not apply to them for leveraged transactions.

– Intermediary institutions become subject to new provisions regarding position limits and guarantees for derivative transactions.

– Obtain a statement from general clients about leveraged transactions.

– Report special circumstances to the Capital Market Board Association.

– Notify the Capital Market Board Association about platforms, programs, modules and attachments that they use in over-the-counter derivative transactions.

– Obtain the client’s approval to change the price, quantity and other aspects of a client’s leveraged sale and purchase transactions.

– Investment enterprises must now determine the differences between the sale and purchase prices in portfolio intermediary activities, in accordance with market conditions.

– Investment enterprises must now publically disclose sale and purchase price proposals through broadcasting corporations determined by the Capital Market Board Association. The Association should also be notified about differences between the purchase and sale prices in leveraged transactions.

– Several changes are made regarding transmission of electronic orders.

Turkey has introduced new preparation and disclosure requirements for financial reports by investment funds, as well as a complete exemption for foreign investment funds. Financial table and auditing requirements related to real estate investment funds and venture capital investment funds have also been simplified.

The Communiqué Amending the Communiqué on Principles Regarding Financial Reporting of Investment Funds (Serial No: II- 14.2) (“Amendment Communiqué”) was published in Official Gazette number 29636 on 26 February 2016, entering into effect on the same date.

Significant changes introduced by the Amendment Communiqué include:

– Housing and asset finance funds must now submit financial reports to interested persons and make the necessary related public disclosures. Annual financial reports must be disclosed within 60 days of finalizing the relevant accounting year. Disclosures must be made on:

– The official founder’s website, and

– The Public Disclosure Platform (if their asset or mortgage backed securities are publically offered).

– Foreign investment funds are now completely exempt from the Communiqué. Previously, foreign funds still had to submit certain information to the Capital Markets Board.

– Semi-annual financial statements are now only required from real estate investments and venture capital investment funds which disclose the value of more than one fund within an accounting period.

– Real estate investments and venture capital investment funds which are required to issue consolidated financial statements, must now also issue individual financial statements during the preparation period.

– Semi-annual financial statements prepared by the real estate investments and venture capital investment funds are now only subject to a limited independent audit.

– The scope of provisions regarding real estate investments and venture capital investment funds have changed, as well as introducing new details:

– Price reports must be prepared for the period determined under a fund’s issuance document.

– The fee determined in the price report will now be taken as the basis for determining the Strike price, which is the basis for share sale and purchase.

Please see this link for full text of the Amendment Communiqué (only available in Turkish).

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Turkey’s Banking Legislation Found Compliant with International Basel III Standards

Turkey’s banking legislation has been found to comply with the Third Basel Accord requirements related to risk-based capital and liquidity coverage ratio standards. Turkey’s Banking Regulation and Supervision Agency (“Agency”) has made a series of changes to secondary legislation recently, ensuring the local regulatory framework meets the international benchmark standards established by the Basel Committee on Banking Supervision (“Committee”) after the 2008 global financial crisis.

After the financial crisis in 2008, the Committee took steps to strengthen the global banking sector and published the Third Basel Accord (“Basel III”). Member states are expected to harmonize domestic law with Basel III provisions by 31 March 2019. The Committee introduced the Regulatory Consistency Assessment Program (“RCAP”) in 2012, to assess the extent of legislative compliance in each country with the Basel standards.

Turkey’s first joined the RCAP in September 2015 following which the Agency published a series of amendments for secondary regulations in the Turkish banking sector. Amendments were made in October 2015 (more), January 2016 (more) and February 2016 (more). The Committee published its RCAP assessment reports about Turkey’s compliance on 15 March 2016.

Turkey has ratified the foundation of the Asian Infrastructure Investment Bank (“AIIB”) into local law as one of the project’s co-founders. The AIIB project highlights the importance of regional cooperation to sustain growth in Asian economies, as well as promote economic and social development. The USD $100 billion project aims to contribute to regional resilience against financial crises and other external shocks in the context of globalization.

On 29 June 2015, Turkey signed the Articles of Agreement and these were ratified on 12 January 2016. Council of Ministers Decision on ratification of AIIB Articles of Agreement was published in Official Gazette number 29592 on 13 January 2016.

– Promote regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions.

Out of 31 founding countries, Turkey is ranked 11th in the project, with a 2.51 partnership share. The top ranked partners are China, India and Russia.

Please see this link for the full text of the Asian Infrastructure Investment Bank Articles of Agreement (available in Turkish and English).

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Turkey Ratifies World Trade Organization Trade Facilitation Agreement

Turkey has ratified a World Trade Organization (“WTO”) agreement establishing an international framework to reduce trade costs. Two thirds of WTO members must complete domestic ratification before the framework will enter into effect.

Turkey ratified the Protocol Amending the Marrakesh Agreement Establishing the World Trade Organization (“Protocol”) and the Agreement on Trade Facilitation (“Agreement”) via Council of Ministers Decision number 2016/8570, published in Official Gazette number 29644 on 5 March 2016.

The Agreement aims to minimize formalities, as well as facilitate and harmonize transactions and procedures which goods are subject to, from productions through to consumers. It particularly focuses on customs duties. The Agreement aims to develop foreign trade infrastructure and strengthen logistics infrastructure via information technologies and automatization.

The Agreement includes the following scope:

– Section I outlines provisions to expedite movement, release and clearance of goods, including goods in transit. It also sets out provisions for customs cooperation.

– Section II outlines provisions which allow developing and least-developed countries to determine when they will implement individual Agreement provisions, as well as identify provisions which these countries will only be able to implement with technical assistance and support for capacity building.

– Section III establishes a permanent WTO committee on trade facilitation and requires members to have a national committee to facilitate the Agreement’s domestic coordination and implementation.

Please see this link for the full text of the ratification decision (only available in Turkish), as well as full texts of the Protocol and Agreement (both in Turkish and English).

Turkey has changed its legislative procedures for preparing regulations. A full regulatory impact assessment is required if the probably annual pecuniary effects of a Draft Law or Decree Law are more than TRY 30 million. A partial assessment is required for draft legislation which falls below this threshold. Previously, the threshold was set at TRY 10 million and the Prime Ministry had discretion regarding whether an impact assessment was required for drafts below this threshold.

The Amendment Regulation on the Regulation on Principles and Procedures of Preparing a Regulation of Council of Ministers Decision No: 2016/8590 (“Amendment Regulation”), was published in Official Gazette number 28658 on 19 March 2016.

The Prime Ministry can adjust the TRY 30 million threshold, if it considers necessary.

The Amendment Regulation introduces the concept of a partial regulatory impact assessment for the first time, including detailed provisions.

By comparison to a partial assessment, the full regulatory impact assessment includes more detailed consideration of:

– Probable benefits and costs.

– Social, economic, commercial, environmental effects of the regulation and its effects on relevant sectors.

– Consultation and consideration process

Article 24 of the Regulation on Principles and Procedures of Preparing a Regulation has been amended to include procedures for regulatory impact assessment. Consequently, Annex 1 of the Regulation is annulled.

Please see the link for the full text of the Amendment Regulation (only available in Turkish).

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Turkey Ratifies Changes to European Convention of Human Rights, Including Confirmation of its Responsibility to Secure Related Rights and Freedoms

Turkey has ratified Protocol number 15, amending the European Convention of Human Rights and Fundamental Freedoms (“Protocol”). The Protocol confirms Turkey’s appreciation of its responsibility to secure the rights and freedoms which the European Court of Human Rights (“Court”) oversees. The Protocol also changes age limits and terms for the Court’s judges, as well as reduces the Court’s application deadline to four months and changes admissibility criteria.

Turkey signed the Protocol on 31 September 2013. The Protocol was ratified via a decision published in Official Gazette number 29656 on 17 March 2016.

Significant changes introduced by the Protocol include:

– A new provision is added to the Preamble of the European Convention of Human Rights stating that:

– The Court has subsidiary authority for the security of the rights and freedoms stated in the Convention.

– Contracting parties have a margin of appreciation of their responsibility to secure the rights and freedoms regarding subjects within the Court’s supervision.

– Judge candidates must now be under 65 years old, at the date of nomination.

– A Judge’s term will no longer expire when they reach 70 years old.

– Parties can no longer object to the Chambers relinquishing a case to the Grand Chamber’s jurisdiction in disputes which:

– Raise serious questions about the Convention’s interpretation.

– May have a result inconsistent with a previous judgment.

– The period after a final domestic decision to apply to the Court reduces from six months to four months.

– The Court can accept applications from any party, but is required to rule applications inadmissible if the applicant has not suffered a significant disadvantage. The exceptions to this rule have changed so that the Court is no longer prohibited from rejecting an application on the basis that the matter has not been duly considered by a domestic tribunal.

Please see this link for the full text of the ratification decision (only available in Turkish), as well as full texts of the Protocol (in Turkish, English and French).

The Turkish Supreme Court recently published a decision in which it chose to uphold rejection of a non-infringement determination request. The request asked the court to give a pre-emptive determination that the plaintiff’s acts and products do not infringe the defendant’s patent rights. The Supreme Court upheld a lower court’s decision to reject the request, on the basis that the plaintiff’s acts are clearly permitted by the legislative Bolar exemption.

Obtaining a declaratory judgment in which a court determines that infringement has not occurred (“non-infringement determination“) is a key pre-emptive defensive measure for protecting intellectual property. Turkish law allows any interested party to ask the courts for a non-infringement determination against the registered owner of a trademark, patent, or industrial design (“Right Owner“). Prior to initiating proceedings, the requesting party will usually send a notice to the Right Owner through a notary public. The notice enables the Right Owner to comment on the requesting party’s manufacturing activities, or manufacturing preparations.

According to the Turkish Patent Law, conducting the necessary studies or trials, then filing a marketing authorization request with regard to a generic drug is not considered to be an infringing act, despite the original drug still being protected by an active patent. These circumstances are commonly referred to as the Bolar exemption.

The plaintiff argued that its license application filed with the Ministry of Health is outside the scope of the defendant’s patent. Accordingly, the plaintiff sought a determination from the court that its acts and products did not infringe the defendant’s patent rights.

The defendant argued that he did not know the content of the plaintiff’s license application and declared that he has not made any allegations about patent infringement. Accordingly, the defendant sought cancellation of the plaintiff’s action.

The First Instance Court rejected the plaintiff’s request for a non-infringement determination on the basis that:

– Neither party sent any cease and desist letters before the plaintiff filed the action.

– Filing the action achieves no legal benefit because the plaintiff’s acts are clearly permitted by the legislative Bolar exception.

The defendant appealed to the Supreme Court, which upheld the First Instance Court’s decision to reject the plaintiff’s claim.

Case reference: Yarg. 11. HD. 23.06.2014, 2014/6103 E., 2014/11843 K

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Turkey Tightens Criteria for Using Biocidal Products and Fogging to Combat Insects

Turkey has introduced new requirements for tools, devices and equipment required for using biocidal products. New criteria have been introduced for obtaining permission to use fogging methods to combat insects. Previously, regulations simply applied a blanket ban on using the fogging method in residential areas, without stating any criteria for using the method elsewhere.

The Amendment Regulation Regarding the Regulation on Principles and Procedures of Biocidal Products Usage (“Amendment Regulation”) was published in Official Gazette number 29654 on 15 March 2016, entering into effect on the same date.

The Amendment Regulation now requires applicants to obtain certain listed tools, devices and equipment in order to be granted permission to use biocidal products by Turkey’s Public Health Agency.

Fogging devices for biocidal products may now only be used to combat insects if all of the following criteria are met:

– The local administration requests it,

– The place is outside of residential areas and cannot be reached by a boat or car (for example, a swamp),

– Fogging does not exceed five meters above the living surface,

– Only biological larvacide products are used, and

– The Public Health Administration gives permission after conducting a special evaluation of the fogging’s time and place.

Please see the link for the full text of the Amendment Regulation (only available in Turkish).

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Turkish Constitutional Court Strikes Out Legislative Ban on Table Football Based on Changed Social Conditions

A recent decision by the Constitutional Court lifts a legislative ban on table football in Turkey. The court held that the provision does not serve the necessary public needs of a democratic society. It noted that the prohibition was introduced in the 1960s, to address social conditions which have now changed. Accordingly, the court held that the provision breached principles of fairness and equity and struck out the aspects relating to table football.

In its decision numbered 2015/58 dated 23 December 2015, the Constitutional Court cancelled the provision in the Roulette, Pinball, Table Football and Similar Games Tools and Machines Law numbered 1072 (“Law”), which prohibits having a table football station in public places, as well as operating, smuggling into Turkey, or producing such stations, even if the station is not used with the intent of making income.

In the case at hand, the first instance court considered a case against suspects who allegedly had a table football system in their workplace. The first instance court believed that Article 1.1 and 1.2 of the Law to breached fairness and equity principles, so requested the Constitutional Court to cancel the articles aspects relating to table football.

The Constitutional Court cancelled these aspects, on the basis that the provision does not serve the necessary public needs of a democratic society and therefore it breaches principles of fairness and equity. The court noted that:

– In a state of law, the Legislator has discretion over crimes and penalties, provided that it complies with fundamental constitutional principles.

– The Law’s preamble states that the prohibition was made based on the social conditions which existed at the date of enactment, in the 1960s.

– Technological developments mean that mind-developing and talent-based games are now played for fun.

– Pursuant to Police Duties and Powers Law numbered 2557, businesses can obtain license for these games, provided there is intention to generate income or gamble.

– Gambling is no longer included in Turkey’s Criminal Law, but rather is now considered to be a misdemeanour under the Misdemeanours Law numbered 5326.

– The businesses which have these table football systems are under government control and audit.

– If a legislative prohibition contradicts principle for the state of law, the related penalty will automatically also be un-constitutional.

Please see this link for full text of the Constitutional Court Decision (only available in Turkish).

The Turkish Constitutional Court recently considered a claim that since part of the legislative basis for an earlier decision had been struck out, the decision now breached the applicant’s constitutional rights. The Constitutional Court held that the applicant’s rights were not violated. It held that Constitutional Court annulment decisions cannot have retrospective effects and the earlier decision served the legitimate purpose of ensuring definitiveness for property rights. The Constitutional Court also noted that the applicant’s delays in pursuing the matters meant that equity leads to him losing the ownership rights.

The applicant claimed that he had inherited property in 1956 from his father, but informal squatters’ housing (“Gecekondu”) had existed on the site since the 1970s. The Gecekondu owners bought a case against the son in 2001, claiming that they had acquired ownership via extended occupation (extraordinary prescription). The court held in 2003 that the Gecekondu owner did not violate the son’s property rights.

According to Article 713 of the Turkish Civil Code number 4721, in certain conditions, an occupant who has remained uninterrupted on the site for at least 20 years can request property be registered in their name if the owner cannot be identified from land registry records and has been either dead or absent for the past 20 years. In 2011, the Constitutional Court partially annulled this provision, striking out the reference to death.

The son claimed in 2013 that since part of the legislative basis for the court’s earlier decision had been struck out, the decision now breached his constitutional rights.

The Constitution states that property rights can only be restricted by law and in the name of public interest. Further, the Constitution, as well as the European Human Rights Convention, give Turkey the authority to control disposal of property rights in the interests of the general public.

The Constitutional Court held that the partial annulment of Article 713 in 2011 did not violate the applicant’s rights because:

– Annulment decisions by the Constitutional Court cannot have retrospective effect (Article 153 of the Constitution).

– The 2003 decision serves the legitimate purpose of ensuring definitiveness for property rights by applying the provision on extraordinary prescription (Article 713).

– If an individual’s property rights are restricted, an equitable balance must be struck between the public good and the individual’s rights. The Constitutional Court held that overall, since the son did not attempt to exercise his succession rights for 46 years, nor his right of action for 26 years, he had lost ownership of the property.

The Constitutional Court’s decision dated 10 December 2015 with the application number 2013/604 was published in Official Gazette number 29593 on 14 January 2016. Please see this link for the full text of the Constitutional Court’s decision (only available in Turkish).

Turkey’s Ministry of Domestic Affairs has issued secondary legislation outlining the requirements for visa, residence permit, deportation and international protection requests. The latest regulation codifies processes and practices which have largely already been applied in Turkey, since the primary legislation entered into force in 2014. It also introduces working principles for the Migration Policies Board, the Migration Consultancy Board, International Protection Evaluation Committee, as well as the Fight Against Irregular Migration Coordination Board.

The Regulation Regarding Law No. 6458 on Foreigners and International Protection (“Regulation”) was published in Official Gazette number 29656 on 17 March 2016.

The immigration processes in question are overseen by Turkey’s General Directorate of Migration. Specific details about the procedures and processes can be found on its website in English, German and French.

Please refer to this link for the full text of the Regulation (only in Turkish).